Morgan Creek Capital Management’s CEO and Chief Investment Officer, Mark Yusko, has recently commented on the US economy’s current state. Moreover, he suggests that Bitcoin could be a ”safe bet” if the US economy indeed faces future hardship.
The ”melting” US stock market could have adverse effects
These comments came during an interview on CNBC’s segment Fast Money. More specifically, Yusko pointed to the ”melting” US stock market as something that could potentially spell trouble for the nation.
In addition to this, the US stock market is intrinsically linked to that of the rest of the world. Yusko also warned that corporations are continuing to take on debt which they cannot afford, as something that could exacerbate the aforementioned problem.
Many different types of debt – student debt, mortgage debt, corporate loans, credit card debt – are currently reaching all-time highs. According to Yusko, this is placing pressure on the US economy, which could prompt the credit bubble to burst.
Furthermore, this comes at a time when the US debt is already being widely publicized. The US’ corporate debt reached a whopping $9 trillion last week. This constitutes a doubling the US debt within a mere two years.
Yusko commented on the issue, stating that he believes this year will see the economy continue to ”melt” rather slowly. Next year, however, is where he foresees things as taking a harder turn for the worse.
”I think next year, with the economic slow down it gets worse, probably double-digit drops and the big year is 2020, when the credit bubble starts to blow up. Every company has binged on cheap debt, they have over-levered, there’s 14% of companies of S&P that can’t service their debt within the next three years of EBITDA.”
Bitcoin could prove a good bet if financial markets plummet
A better bet in the long term is Bitcoin, according to Yusko. He noted that the premier cryptocurrency would be a good asset to hold on to, due to it being a part of a decentralized network. This would further guarantee that the performance of the asset does not hinge on the macroeconomic performance of financial markets.
Although Bitcoin has lost a significant amount of its value in the past year, dropping 80% from its peak valuation, Yusko is bullish. He also stressed that the coming years would see the cryptocurrency become increasingly useful, with boosted awareness and adoption – which he argues will drive a higher valuation.
Image Source: “Bloomberg“
Rasmus Pihl is a writer for Toshi Times by day and an avid follower of the blockchain industry by night. Rasmus holds a Bachelor’s Degree in Marketing from the Gothenburg School of Business, Economics, and Law and runs a Swedish marketing consulting firm. Moreover, when he isn’t writing for Toshi Times, traveling, working or changing the world in some other capacity, Rasmus is more than likely caught up in postgraduate studies.